Issue 4 – Element 4.0: The (swot) Matrix
Element 4.0 – The (swot) Matrix
Element 4.0 (continued)… I’ve had a lot of questions/comments about my last Newsletter (ISO 9001:2015 Newsletter Issue 3) where I discussed Strategic Planning and SWOT Analysis. Since I like to be practical when dealing with ISO, I wanted to share with you a useful tool that I discovered many years ago called The (swot) Matrix… actually it’s just called a SWOT Matrix but I needed to get your attention. I have used this tool in every one of my Strategic Planning sessions to date and it always gets everyone around the table to participate and keeps them engaged. I’ve also used this tool with a company with only 3 people and one with over 500 people… (and even with just a single department within a larger organization). My point is that this tool has a lot of flexibility and generates some great outcomes, not the least of which is alignment amongst a group of people on what their business priorities are.
Oh, one more thing… this tool is just another way to easily address all of the ISO 9001:2015 requirements within Clauses 4.1 Understanding the Organization and its Context; 4.2 Understanding the Needs and Expectations of Interested Parties; and most definitely Clause 6.1 Actions to address risks and opportunities.
So let’s get to it… below is the Template version of this tool…
(Feel free to download it… just click on the image and a dialogue box should open up in order to save this as a MS Word file)
NOTE: I plan to pull together an actual example of a SWOT Matrix filled out, based on a sampling from my Client sessions over the years. I hope to have this done for the next Newsletter issue (in a few weeks time) so stay tuned for that downloadable example to go along with this template.
So how does The (swot) Matrix work?…
Well first of all, SWOT stands for Strengths – Weaknesses – Opportunities – Threats, and as a business analysis tool it has been around for a long, long time. The power of using a “matrix” approach when performing a SWOT Analysis is that it turns this activity into a series of actions (or strategies) that companies can adopt. How does it do this? …well it takes the four (4) simple lists of brainstormed items (S-W-O-T) and asks the group to connect any dots they see. The “group” by the way is whoever is trying to lead the company forward into the future. Each quadrant of the SWOT Matrix represents the results from looking at only two (2) of these simple lists to uncover potential actions (strategies) that the business could take.
Note the use of the word “Top” for each of these lists, i.e. Top Strengths, Top Weaknesses, etc. It’s critical that you filter out the top 5 most important items to consider on each of these four (4) lists, otherwise this session would take days to accomplish. By the way, don’t underestimate the amount of time it does take to get agreement on what is considered “Top” in your organization… it certainly generates some lively discussions, which are important to have, but lively none the less. As I said earlier, the strength of this tool is that it walks a group of people through a structured thinking process, and ends with them all reading from the same page.
Each quadrant of the SWOT Matrix poses a different question to the group. The intent of the upper left quadrant (Strengths-Opportunities) is to review the Top Strengths alongside the Top Opportunities and debate potential strategies that could be employed to take advantage of an important opportunity that is presenting itself today, using a key strength that you have. You will see that the top two quadrants represent “offensive” Strategies while the lower two quadrants represent “defensive” Strategies, which you want to keep balanced.
Keep in mind that the Template shows ten (10) potential Strategies, the key word here being “potential”… for this exercise, my experience has shown that less is better since trying to keep 10 plates spinning (10 strategies) can overwhelm a Management Team. Also note that each Strategy has a place in one of the quadrants and is not sitting outside the SWOT Matrix. This is another important feature of this tool in that it ensures that there are no “rogue” Strategies being pursued by well meaning Managers. Each Strategy must address at least one pair of Top S-W-O-T’s, otherwise it is not an action that the company should waste resources on.
This SWOT Matrix tool/approach lies somewhere between the extremes of implementing a full fledged formal strategic planning process at one end of the spectrum, to using a simple/informal/reactive method for setting company direction, at the other end. The first year using this tool is usually the most challenging, with subsequent years simply updating it to reflect the current reality, and either re-confirming the previous year’s Strategies and/or establishing new ones.
As I said above, make sure to watch for our next Newsletter issue where you can obtain an example of a completed SWOT Matrix…
PS: Don’t forget to look at the Q&A section below for some final thoughts…
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Q: How can I get my Managers interested in doing strategic planning?
A: I suppose that depends on how your Management Team currently performs business planning each year. If they do “something” in this regard then ask them if they do the traditional SWOT Analysis. If they do, then show them the SWOT Matrix tool and explain it to them in 2 minutes or less. As a business tool, it’s fairly self-evident how it works and what it can achieve. Either way, suggest that they try it out at their next annual planning session. If they don’t do “anything”, then forward my Newsletter to them and follow-up a few days later to answer any questions they might have, and suggest that it could be a way to re-energize the current way they perform Management Review meetings once a year. If you’re not sure, or if your Management Team has questions you can’t answer, then feel free to contact me and I’ll see if I can help.
Until next time…
Helping Business Professionals Reduce Risk and Remove Waste!